AstraZeneca is Britain's second-biggest pharmaceutical company. It employs 7,000 people here, supports another 23,000 jobs and it contributes, on its calculations, £3.8bn in value added to the UK economy and about 2.3% of British goods exports. It is building a £330m headquarters in Cambridge that will be an important ingredient in the so-called golden triangle of Oxford, Cambridge and the London universities which, Boris Johnson declared earlier this month, will become a life sciences centre to rival the Boston Bay area in the US. In short, AstraZeneca is absolutely integral to the future of Britain's science base. It is also rumoured to be prey for an even bigger, even richer company, Pfizer. That's the US-based giant which shut down its research and development centre at Sandwich in Kent three years ago with the loss of 2,400 jobs.

Last weekend it was reported that AstraZeneca had rebuffed a potential bid from Pfizer of £60bn. But no one thinks the US company has gone away. A deal of that size would make it the biggest takeover of a British firm in UK history, five times the size of the highly controversial Kraft capture of Cadbury in 2010, three times as big as Telefonica's purchase of O2 in 2005. The signs are that AstraZeneca boss Pascal Soriot is ready to fight, warning of the disruptive impact of such deals, just as his company looks poised to launch a new generation of cancer and respiratory drugs.

Big Pharma is into one of its periodic rounds of restructuring. There is widespread admiration for the multibillion-dollar friendly asset trade that GlaxoSmithKline pulled off with Novartis earlier in the week as a pattern for constructive advance at a time when profitability for R&D has halved. The Pfizer bid is, it is feared, more typical of the other model for Big Pharma, the one where the focus is on the short-term share price and aggressive cost cutting. That's the model favoured by the hedge fund-backed US company Valeant which is currently advancing on Allergan, the makers of Botox. Victory would make Allergan the 36th company it has taken over in less than five years. Spending on R&D in Valeant-owned companies is reported to be around 3% of revenues, compared with a more traditional 20%.

So there is a double challenge here for the government. First, ministers must decide whether their hands-off approach to business really does extend to remaining neutral in the face of a hostile takeover of one of Britain's biggest businesses, the legacy company from ICI's drugs division, by a US-based company that has already shown itself an unreliable ally. And, second, they must consider the likely impact on AstraZeneca of a profit-seeking, investment-averse parent company. It really does not look like a very hard decision to make – as long as pragmatism trumps ideology.